This seems to make sense on a purely financial level. GM has always struggled to make consistent profits from their European operations, while PSA has managed a fairly miraculous turnaround over the past five years, going from losing over €5 billion in 2012, to a very healthy profit margin of almost 7% for 2015/6.

This seems to make sense on a purely financial level. GM has always struggled to make consistent profits from their European operations, while PSA has managed a fairly miraculous turnaround over the past five years, going from losing over €5 billion in 2012, to a very healthy profit margin of almost 7% for 2015/6.

I think most of their profit was done by reducing engines, platforms and great business in China (PSA with dongfeng is big there). I doubt they can work miracles on Opel, although I think it is nowadays not the products that make Opel loose money (gone are the days of dreary Vectras and rusty Astras), but rather how they are mostly a Euro only brand although being actually sold globally, just in most non EU markets as Chevy, Buick or Holden, so profits generated elsewhere.

Quote:

Originally Posted by swizzle

Why would GM give up European sales?

This remains the biggest question for me. Even if PSA would - in a similar deal as GM tried to offload Saab - just receive the plant and brand name from GM, but not the platforms, GM would have to either relaunch Chevrolet (and after the "here is Daewoo, no actually now Chevrolet, hey, here are now our Euro friendly models aaaaaand we are gone form Europe" that could not work) or use some new brand name (Buick? Holden?), but I really see no point in giving up on the whole European market, including their European R&D centers....

Why in hell would GM want PSA? All I can imagine is to put them out of business. Merging with a company that has no cutting edge engineering prowess is absurd. Maybe GM is doing this and will send De Nysschen to work his magic on PSA so Cadillac can be saved.

well... judging by the havoc GM caused on PSA development plans since their "cooperation" started in 2009 (delaying C-Elysse/301 because "we both could use Chevrolet models for low end"; cancelation of PSA own double clutch gearbox development, because "you could use GM's; cancelation of C5 successor, because " we should jointly develop Insignia, C5 and 508 successor and produce it in vacant Opel factory; delaying EMP1 platform so it would suit Corsa/C3/DS3/208 quadriplets.... etc, etc.), you might be right in "putting them out of business" part...

So it might make sense for GM to get rid of Opel, but what does PSA get out of this?

Economies of scale. If Peugeot's modular platforms and engines can be cost-effective spread across a production output of 1.5 million vehicles, imagine how much more cost-effective they'd be spread across another 1.1 million units.

Economies of scale. If Peugeot's modular platforms and engines can be cost-effective spread across a production output of 1.5 million vehicles, imagine how much more cost-effective they'd be spread across another 1.1 million units.

Does Opel have a lot of production capacity outside of Germany? My understanding is that all PSA would conceivably get is a factory in Germany. The production costs there would be quite high, no?

Almost every brand is doomed. Better to take risks a have some hope of winning, than do nothing and hope everything will go well. I can think of very few brands that deliver what customers want/need. One of them is Dacia. PSA and Opel? Nothing really. If they went full electric and plug-in hybrid, that could have been something. But they are too afraid, and it will cost them. The tech by itself is available, and other than battery, will not evolve much in 10 years.